Nothing can derail business performance quite like a toxic company culture. When negative attitudes, conflict, and miscommunication run rampant through an organization, productivity is quick to drop and employees often head for the exit. The combination of high turnover and a lack of results derived from a poor company culture can have quick, devastating, and sustained negative consequences for your business.
As business consultants, we’ve experienced the compounding negative impact a dysfunctional company culture can have on growth firsthand. Improving company culture is one of the most common reasons companies of all sizes turn to businesses consultants for guidance. Because we’ve seen so many examples of poor performance driven by a bad culture, we know what it takes to fix the problem.
If your negative or toxic company culture is leading to significant performance issues, it’s not too late to turn things around.
How To Identify A Dysfunctional Company Culture
Depending on the size of your company, it may not be obvious that dysfunction exists throughout different layers of your organization; however, the signs of a bad company culture are easy to spot. Here are some common things to look for:
- Poor Communication – When employees and teams aren’t effectively communicating during team projects or activities, it leads to misunderstandings and conflict.
- Employee Burnout – When employees put in far too much time and don’t feel as if a work/life balance is possible, it quickly leads to burnout.
- A Lack of Accountability – When no one is held responsible or accountable for achieving goals and outcomes.
- Ineffective Management – Managers who don’t take the time to listen, coach, and develop talent can drive employee fear, dissatisfaction, and turnover.
- Fear – If employees are shy, nervous, or afraid to speak up, this is a major sign of dysfunctional company culture. Employees need to be able to work with a sense of psychological safety, which means they can be themselves and pursue thoughts and ideas without the threat of negative repercussions.
If you’re noticing any of these signs at any level of your organization, it’s important to resolve them quickly. A dysfunctional workplace can quickly spread throughout the entire organization.
How To Fix A Negative Company Culture
Before setting out to fix your company culture, it’s important to understand these things take time.
Improving a culture is accomplished through changes to your own behaviors, management strategies, and leadership style. This can take several months, and you may experience a high rate of employee turnover before you see results. Here are some tips to help you along the way
First and foremost, changing a company culture starts at the top of the organization. As an executive or manager, it’s your job to set an example for the rest of the company. You need to identify exactly what type of company you want to lead. Be clear on your values and mission and then incorporate those elements into your day-to-day work.
Create Opportunities For Feedback
Employees want the ability to effectively communicate with company leaders. They also want to feel as if leaders genuinely care about their concerns and well-being. As a leader, you should encourage your employees to reach out to you directly with feedback and concerns.
You can achieve this by establishing an open line of communication through an open door or email policy. When employees do reach out, you must take the time to listen. Don’t be dismissive, rather, take time to think about what you’re hearing before crafting a response.
On the flip side, you should make sure the line of communication works both ways. Employees need consistent feedback to grow. Many managers struggle to make time to develop talent and provide feedback, which can leave their teams without clear direction. Be sure you’re giving feedback as often as you’re receiving it.
We often see a lack of transparency greatly contribute to a negative company culture. When employees are in the dark, they’re much less engaged. One of the best ways to keep employees happy and motivated is to show them how their work connects with the bigger picture.
Leaders should always be transparent about the company’s mission and take the time to explain “the why” behind certain projects or initiatives. When leaders and managers simply become dictators and fail to provide employees with reason and meaning, workers will quickly become dissatisfied.
When employees have conflicts with one another, teamwork is likely to suffer. It’s important for team members to be able to challenge one another, but there has to be an element of respect involved in order to do so in a constructive format.
To build respect among coworkers, make sure team-building activities, company-wide meetings, and offsite days are all part of your culture. These initiatives will provide colleagues the chance to get to know one another on a personal level.
Reward Good Work
Rewarding your top performers is one of the best ways to increase employee engagement and help correct a dysfunctional company culture. When employees go above and beyond, make sure to acknowledge it. When annual compensation comes around, be sure to award merit increases and bonuses based on your employee’s accomplishments.
Keep in mind, rewards don’t always have to be in monetary form. Recognition is an incredibly effective way to award good work. Whether it’s calling out an employee or team’s accomplishments during a meeting or via email, or treating a top performer to lunch, there are many different ways to reward good work.
Oftentimes, a dysfunctional workplace is the result of rapid growth. While growth is positive, company leaders must take the time to build a foundation for growth. Your company culture should be established as a foundational platform that enables workers and teams to grow the right way. Take time after growth “spurts” to allow your team to analyze the growth, determine new processes to streamline future growth efforts, and assess what they can learn to encourage future expansion while maintaining work/life balance.
If you’re battling a negative company culture, know it’s possible to turn things around by making significant changes to your management approach. At Lilly Consulting Group, we have extensive experience in helping organizations of all sizes transform their company culture. Contact us today.